¶1. (C) SUMMARY: With time dwindling to line up funding and
party support, presidential hopefuls increased efforts to
break away from the pack, or undermine their rivals. The
hasty merger of parties loyal to President Arroyo and former
President Ramos appeared to bolster Malacanang Palace’s
kingmaking role in the planned May 2010 presidential poll,
but left deeply bruised egos in its wake. Rivals of wealthy
“presidentiable” Senator Manuel Villar sought to undercut his
bid with an ethics investigation, even as one of his chief
detractors faced damaging scrutiny over a brutal double
murder in 2000. President Arroyo, hoping to dispel rumors
she seeks to extend her term in office, reaffirmed her
support for next year’s elections, while her Congressional
supporters passed a resolution significantly bolstering the
House’s power to change the Constitution, inviting certain
Senate and Supreme Court challenges. Meanwhile, election
officials moved closer to finalizing a massive election
automation scheme that faces daunting technical, political,
and legal difficulties.

¶2. (SBU) In this second of two cables, we examine the latest
changes in the political landscape that will affect the
outcome of the 2010 elections and also take a closer look at
second-tier presidential candidates. END SUMMARY.

WINNOWING THE CANDIDATES
————————

¶3. (C) Major political events in recent weeks and tighter
poll numbers among presidential competitors are reshaping the
Philippine election landscape. Latest figures show five
contenders polling significantly above others by at least six
percentage points: Vice President De Castro, former President
Joseph Estrada (whose candidacy would face serious legal
hurdles), and Senators Manuel Villar, Manuel Roxas II, and
Francis Escudero. Support for Senators Loren Legarda and
Panfilo “Ping” Lacson tailed off significantly. A separate
poll, allegedly commissioned by the wealthy Villar, shows him
in the lead at 22 percent, four points above Noli De Castro.
Voters’ preference for National Defense Secretary Gilberto
Teodoro was low in the one survey that measured him, drawing
clear concern from his Malacanang Palace supporters about his
lack of exposure to the public despite his role as Defense
Secretary.

POLITICAL POWERHOUSE
——————–

¶4. (C) Malacanang Palace moved decisively to shore up its
role as kingmaker, forcing a merger of the two political
parties headed by President Arroyo and influential former
President Fidel V. Ramos. The hasty union May 28 of
Lakas-Christian Muslim Democrats (Lakas-CMD) and President
Arroyo’s Kabalikat ng Malayang Pilipino (KAMPI) party sealed
Arroyo’s control over the largest political machine in the
country, and created a political and financial powerhouse
that can draw on Malacanang’s massive (and legal) pork barrel
assets to affect every level of the May 2010 polls —
president, vice president, Senate, House, provincial
governors, and mayors. However, the quick merger left Ramos
and others crying foul over a perceived lack of consultation,
forcing Palace aides to rush to appease the former President.
Palace Executive Secretary Eduardo Ermita told the
Ambassador that Ramos was disappointed President Arroyo did
not personally engage him about the merger, but claimed he
had assuaged his mentor Ramos’s anger over a bottle of
expensive brandy. Ramos was not the only holdout.
Representative Luis Villafuerte, who just resigned as KAMPI
president, did not attend the merger ceremony because the
parties had not resolved how the merger would affect slates
of competing local candidates.

ADMINISTRATION SEEKS A WINNER
—————————–

¶5. (C) A Lakas-KAMPI screening committee headed by
Presidential Political Adviser Gabriel Claudio is
scrutinizing the shortlist of possible presidential and vice
presidential candidates, reportedly narrowed down to Vice
President Noli de Castro and Defense Secretary Gilberto
Teodoro. De Castro, who has consistently topped popularity
surveys but has also appeared ambivalent about whether he has
the drive to seek the Presidency, continues to state it is
still too early for him to decide (contenders face a November

MANILA 00001207 002 OF 004

30 deadline for declaring their candidacy). He is reportedly
being wooed by the Nacionalista Party to become Senator
Villar’s vice presidential running mate. Teodoro, who has
strong credentials but lacks popular recognition, rejected
suggestions he run for vice president, clarifying he was
“seeking the presidency and nothing else.” Observers
speculate Teodoro will run as an independent if not drafted
by Lakas-KAMPI. Interior Secretary Ronaldo Puno, a powerful
political insider who has managed several successful
presidential campaigns, declared he is seeking the vice
presidency under the administration ticket. Lakas Secretary
General Senator Juan Miguel Zubiri said the party is open to
considering candidates from other parties who are doing well
in the surveys, but he emphasized the need for the coalition
to stay intact to give the administration candidate an edge
in a multi-cornered fight for the presidency.

ARROYO AVERS 2010 ELECTIONS ON, BUT DOUBTS PERSIST
——————————————— —–

¶6. (C) President Arroyo publicly reaffirmed her support for
next year’s elections, saying the merger of the two parties
“is proof of our readiness, nay, determination, that the
elections do push through.” But her comments did little to
dispel widespread rumors she seeks an extension of office
through constitutional revision, especially as her supporters
in the House of Representatives rammed through a resolution
June 2 that would give the House significant leverage over
the Senate in approving constitutional amendments. With a 2-1
majority in the House, her supporters had no trouble passing
a bill that would create a unicameral “constitutional
assembly” to weigh proposed amendments to the Marcos-era 1987
constitution (septel). The Senate’s normal veto power would
be eliminated under this “ConAss” scenario, as Senators and
Representatives would sit as equals in the debate and voting.
At a June 3 private breakfast with the Ambassador,
Presidential Management Staff Secretary Hermogenes Esperon
said that President Arroyo had “zero intention” of staying in
power by amending the Constitution, but might consider
running for Congress, where as a sitting Representative she
could still enjoy some privileges. However, opponents of
constitutional revision suspect Arroyo’s supporters intend to
propose conversion to a unicameral, parliamentary form of
government, enabling Arroyo to run for Prime Minister to
maintain power. The fate of the ConAss plan is far from
clear, as it faced intense criticism from the Senate and
political activists, and a likely Supreme Court challenge.

UNDERMINING OPPONENTS
———————

¶7. (C) Political mudslinging and maneuvering has escalated,
with rivals seeking to hamstring wealthy Senator Manuel
Villar, who was removed from his position as Senate President
in November 2008 after declaring his intention to run for
President. Villar is under Senate investigation for
allegedly benefiting from government road projects near his
real estate developments. His opponents, including fellow
presidential candidate Senator Ping Lacson, have effectively
pushed an investigation by the Senate’s Ethics Committee into
his alleged wrongdoings. However, Lacson himself is also
expected to become the object of a potentially damaging
murder investigation. Former police officer Cezar Mancao was
extradited from the U.S. June 6 and is expected to testify
that Lacson ordered underlings to carry out a brutal double
homicide in 2000 when he served as chief of the Philippine
National Police.

CONCERN OVER COMELEC BIDDING PROCESS
————————————

¶8. (C) On the procedural side, the Commission on Elections
(COMELEC) is poised to award a contract for a massive
election automation scheme to supply over 82,000 optical
scanning machines for use in every voting precinct. COMELEC
continues to review the qualifications of the sole finalist
in the bidding for the contract, the Dutch-Venezuelan
consortium Smartmatic, which supplied the automation
equipment for the 2008 elections in the Autonomous Region of
Muslim Mindanao. The four disqualified U.S. bidders
expressed concern about perceived favoritism toward the
finalist. During a test at COMELEC, Smartmatic’s optical
scanner burned due to improper wiring, while their paper
ballots failed to meet bid specifications. The last U.S.
firm in the running, ES&S, was eliminated based on alleged
failure of the company to comply with a bid security payment
of over 44 million pesos (USD 960,000). The outcome of the
bidding process has raised some concerns about COMELEC’s
transparency as well as the competence of the selected
supplier.

MANILA 00001207 003 OF 004

COMELEC PREPARING FOR ELECTIONS
——————————-

¶9. (C) COMELEC Chairman Jose Melo told the Poloffs June 3
that COMELEC was certain the May 2010 elections would proceed
as expected and was working to overcome the tremendous
logistical challenges they expect to face. Melo said that
COMELEC was seeking agreement from the Philippine National
Police for a total ban on guns in the vicinity of voting
precincts, with special waivers to be considered for some.
This policy would represent a change from past practice in
which gun owners were asked to apply for permits to bring
their guns, a requirement which unregistered gun owners did
not respect. Melo noted that COMELEC would be the first body
to rule on controversial issues such as the eligibility of
former President Joseph Estrada to run for another term. If
appealed, the cases would be heard directly by the Supreme
Court, which has many justices recently appointed by, and
possibly sympathetic to, President Arroyo.

¶11. (C) Senator Richard Gordon, 63, has long harbored
presidential ambitions and has grabbed every possible
opportunity — as former Tourism Secretary and as current
Philippine National Red Cross Chairman and Senator — to gain
media mileage. He believes that voters are mature enough
“not to be swayed by survey results but consider the track
record of candidates.” Known for his energy and dynamism in
public service, Gordon is credited for effective leadership
as mayor of Olongapo City, his “Wow Philippines” campaign to
attract higher tourism arrivals, and Red Cross rescue and
relief operations after natural disasters. He drew
significant criticism, however, for his emotional (and
ineffective) handling of negotiations to release three
International Committee of the Red Cross workers held hostage
by terrorists. He is supported by the Bagumbayan (New
Nation) Movement organized by his political followers, and
has said he will not seek, but would welcome, President
Arroyo’s support.

CHAIRMAN BAYANI FERNANDO
————————

¶12. (C) A determined candidate, Metropolitan Manila
Development Authority (MMDA) Chairman Bayani Fernando, 62,
plans to pursue his candidacy even if his own party, Lakas,
will not draft him. Inspired by his success as mayor in
transforming suburban Marikina town into a model city, and as
MMDA chairman in helping restore order in highly congested
Metro Manila, Fernando is seeking a bigger stage for his
socio-economic reform programs. He advocates a disciplined
and productive citizenry and a determined political
leadership that pursues action, not talk. Trailing behind in
the surveys, he has embarked on an early public relations
campaign nationwide. His posters are visible in Metro
Manila; he hosts weekly radio and television programs and
travels frequently to the provinces. Fernando is a
mechanical engineer by profession and owns construction firms
BF Corporation and BF Metal Corporation. His wife, Marides
Fernando, is Mayor of Marikina City.

MAYOR JEJOMAR BINAY
——————-

¶13. (C) Also at the tail end of the surveys is Jejomar Binay,
66, the long-time mayor of Makati City, the country’s chief
financial district. Another staunch Arroyo critic, he heads
the “United Opposition,” a frontline coalition of political
parties, politicians, and supporters of deposed President
Estrada and the late presidential contender Fernando Poe Jr.
A former student activist, street parliamentarian, and human
rights lawyer during the Marcos rule, Binay has helped
support protest movements against the Arroyo administration.
His wife Dr. Elenita Binay has also held office, while his
daughter represents Makati in the House of Representatives

MANILA 00001207 004 OF 004

and his son sits on the Makati City Council. Binay supports
a review of the Visiting Forces Agreement, which provides the
sole legal framework for the presence of all U.S. military
personnel in the Philippines.

BROTHER MIKE VELARDE
——————–

¶14. (C) The spiritual leader of the Catholic charismatic
movement El Shaddai, Brother Mike Velarde, 69, has expressed
interest in running for President in 2010. This is a
departure from his usual role as an endorser of presidential
candidates. Counting on the group’s huge membership —
estimated at 12 million — presidential aspirants would troop
to Velarde’s door to court the votes of his flock. Velarde
is reportedly wooing influential Church leaders to support
his candidacy and has joked that with his million of
followers and the support of the Church, there would be no
need for an election. However, it is doubtful that the
Church will break its neutrality in political exercises for
his sake. Velarde asserts he is the leader who can “pull us
together in one direction, a leader for all Filipinos, not
just for some parties.” However, many believe he can best
serve the people as a preacher. Velarde has raised millions
of pesos in contributions from his followers and has wisely
invested them in real estate projects for El Shaddai members.

GOVERNOR EDUARDO PANLILIO
————————-

¶15. (C) Emboldened by his victory in the 2007 gubernatorial
race over long-entrenched and wealthy politicians in Pampanga
Province as well as by the prodding of reform-oriented
citizens, priest-turned-politician Eduardo Panlilio
originally had announced he was interested in joining the
forthcoming presidential race. Several Catholic bishops
openly criticized Panlilio for mixing religion with politics,
advising the 55-year old prelate to leave the priesthood
should he decide to stay in politics. Panlilio has indicated
he is willing to give way and will instead support a worthy
presidential candidate.